U.S. Chicago Business Barometer Rose to 63.1 in December
Summary
- The Chicago Business Barometer rose in December, picking up again after November's decline.
- Inventories hit a 4-year high as firms are stockpiling to get ahead of supply-chain disruptions.
- The employment index dipped again in December.
The ISM-Chicago Purchasing Managers Business Barometer rose to 63.1 in December from 61.8 in November. The Action Economics Forecast had expected a drop to 62.0 from a projection of 67.7 in November. An index above 50 suggests growing business activity in the Chicago area. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure rose to 63.2 from 62.8 in November.
Production rose modestly to 61.9 in December from 61.5 in November. Thirty-eight percent (NSA) of respondents reported a higher level of output and 15% reported a decline. New orders rose to 66.5 in December from 58.2 in November, while order backlogs dropped 5.2 points, to 55.6 from 60.8 in November, reaching the lowest reading this year.
Supplier delivery speeds edged down to 80.5 in December from 83.2 in November. Sixty percent (NSA) of respondents reported slower delivery speeds while none reported quicker speeds. Inventories rose to 62.7 in December from 59.6 in November and hitting a four-year high as firms create buffers for longer lead times.
The employment index declined again to 44.6 in December from 51.6 in November and 56.6 in October, still indicating that firms have a hard time finding qualified workers for available jobs. A reduced 11% (NSA) reported more hiring while an increased 25% reported less.
Prices paid eased to 89.6 in December from 93.8 in November and a multi-decade high of 94.3 in October. Eighty-one percent (NSA) of respondents raised prices while 2% lowered them.
This month's special question asked what firms anticipated was "the biggest challenge to executing plans for the holiday season?" The largest share (36.4%) said global shortages, followed by logistics (25.0%) and staff shortages (22.7%).
The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and nonmanufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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